Manufacturing: Bye-bye textiles – car parts and hardware are the new hot spots

Newsroom 04/03/2008 | 17:43

The textile industry in Romania, flourishing at the beginning of the 2000s in Romania in lohn factories, has been seriously hit by Romania's EU entry. Textile producers have started to go bankrupt or become acquisition targets, factories have closed. But the upside of the story is that the EU accession brought other types of companies which found fertile ground for manufacturing their products in Romania. Not only has the country's EU entry contributed to an increasing number of companies which have established factories here, but these players were mainly driven by larger companies which came to Romania and needed their suppliers close.
Romania was a good choice for such companies as it provided a cheaper labor force, but was closer to Western Europe than other countries with low labor costs, such as China.
The recipe applies to the car marking industry, which has boomed in Romania in the last couple of years, mainly boosted by Dacia Renault's Logan production. Dacia, now the second ranking brand within the group, was snapped up by Renault in 1999. Romania has become the group's sixth market.
International car parts makers have followed Renault to Romania. Companies like Valeo, Euro APS, Johnson Control, ACI, Piroux, Iri, MCI Ingenierie, and Metal Impex have started producing locally in Pitesti, where Dacia Renault has its production unit.
Not only car parts makers providing products to Dacia have established in Romania. Companies like INA-Schaeffler, Hutchinson, Trelleborg Automotive, Marquardt Schaltsysteme, Brose, Calsonic Kansei, HTP High Tech Plastics, Schneider&Oechsler International, Honeywell and Takata-Petri have chosen to open production units in Romania in the last few years.
Carmaker Ford's purchase of Automobile Craiova last year with plans to produce locally will be a new stimulus for the companies which provide Ford with its needed car parts. General Motors is also analyzing the possibility of producing in Romania, according to media reports, while Daimler Chrysler is in more advanced preparations to produce in Romania, after having chosen it over Poland.
Romania was also the top choice for another international producer, which has given up an existing production location to move to Romania. Finnish mobile phone producer Nokia decided to move production from the German town of Bochum to Jucu, in Cluj County. The decision to build the new Nokia plant in Romania was announced in spring 2007, and was attributed to the growing demand for mobile devices on the Eastern European and African markets. Cluj was selected as the location since it could provide a qualified labor force, efficient internal and external logistics, it had an industrial tradition and last but not least it could accommodate an industrial park in order to host Nokia's suppliers and partners.
Nokia has recently started production in its new Jucu factory, and the phones assembled in Romania will be exported to markets in Europe, Africa and the Middle East.
The first stage of production will see Nokia hire an estimated 500 people in Cluj. By the end of 2009, the production unit will have above 3,500 employees.
The cases, batteries, photo cameras, keyboards and screens for the mobile phones produced by Nokia in Cluj will be provided by a Chinese company which will make an investment worth EUR 150 million in the industrial park Tetarom III in Cluj.
The investment of the Finnish company reaches EUR 60 million and should generate further investments from its suppliers and providers totaling EUR 300 million and 11,000 new jobs.

By Corina Saceanu

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